Costs that might be incurred by service, merchandising, and manufacturing compan

Question

Costs that might be incurred by service, merchandising, and manufacturing companies are described below.                 Classify each cost as variable (V) or fixed (F) with respect to volume or level of activity.  

_____Sales commissions paid to sales associates in a department store

_____Shipping cost for Amazon

_____Electricity cost to heat and light a law firm

_____Rent on a storeroom used by Turf Pros to store lawn equipment

_____Salary of a supervisor in a Best Buy distribution center

_____Wages paid to production workers in a General Motors plant

_____Insurance on a Hershey factory

_____Fuel costs for Southwest Airlines

_____Depreciation of office equipment by Microsoft Corporation

_____Dishwashing in an Olive Garden restaurant

_____Salary of the CEO of Microsoft

_____Lubricants used to maintain machinery in a textile factory

_____Cost of metal cans used in a dog food factory

_____Cost of pizza boxes for Domino's Pizza

_____Material handling costs for Frito Lay

Explanation / Answer

FIXED COST:

Dishwashing in an Olive Garden restaurant

Salary of the CEO of Microsoft

Cost of metal cans used in a dog food factory

Material handling costs for Frito Lay

VARIABLE COST:

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